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A trader who returned from a three-hour lunch involving alcohol and racked up big positions in oil futures, trading every seven seconds for two hours, and then concealed the trades from employer Morgan Stanley, today put the bank at the centre of the second such scandal in the space of a week.

The Financial Services Authority banned former freight and oil trader David Connor Redmond after he took out a large short position in West Texas Intermediate oil futures while under the influence of alcohol. He then sought to conceal the trades from Morgan Stanley after realising they would breach the bank's value-at-risk limits. He has been banned for two years.

There is no suggestion that the bank, which dismissed the trader in March last year when he was unable to give an explanation of the size of his trading positions, is at fault. However, the ban comes a week after the bank was fined over a separate case of mismarked trading positions.

On February 6 2008, Redmond, now 28, returned from a three hour lunch to the Morgan Stanley office, where he built up a substantial position in WTI Futures on the ICE Futures web-based trading platform, knowing that the position would have breached the firm's risk limits.

Redmond had been drinking at the extended lunch break, and though he wasn't visibly drunk, the FSA said that the alcohol over lunch "affected his behaviour on his return to the office."

The FSA final notice said: "An analysis of Mr Redmond's trading between 17:04 and 19:37 on February 6 shows that he traded almost continuously over this period, with an order on average every 7.5 seconds."

He concealed the position overnight by transferring the short positions from his own strategy to one of his colleagues, without that colleagues' knowledge. Redmond's trading represented over 30% of the total lots of WTI Futures on that day, and the short position equated to an exposure of around $10m (€7.3m).

By around 14:00 the next day, Redmond had sold out of his short position at a profit. Shortly afterwards, he discovered Morgan Stanley was investigating his trading, and when he was unable to provide a satisfactory explanation, he was suspended. On March 10, he was dismissed for gross misconduct.

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After his dismissal, Redmond was employed by another firm from May to November 2008, when an application by that firm for approval of Redmond was withdrawn.

In an FSA statement, the regulator said it makes "no criticisms of Morgan Stanley or any other individuals at the firm in this case. Morgan Stanley promptly identified and investigated the issue and took swift action against Redmond. "

A spokesman for Morgan Stanley said: "Morgan Stanley promptly identified and investigated the issue and took swift action against Redmond. He was suspended by the firm and subsequently dismissed."

Last week, the FSA fined Morgan Stanley in relation to a separate case in which Matthew Piper, a former proprietary trader on Morgan Stanley's investment-grade trading desk in London, was found guilty of mismarking his positions by up to $120m.

Piper was banned for two years and fined £105,000, which he will pay in installments to as not to cause "serious financial hardship". Morgan Stanley was fined £1.4m for "failing to conduct its business with due skill, care and diligence and failing to take reasonable care to organise and control its affairs responsibly."